S. Africa Mulls Building Refinery for Iranian Oil

S. Africa Mulls Building Refinery for Iranian OilS. Africa Mulls Building Refinery for Iranian Oil

South Africa is considering building an oil refinery that will process Iranian crude to bolster its gasoline supply and reduce its dependence on foreign companies, a government official said.

Plans for the new refinery were being “conceptualized”, Tseliso Maqubela, deputy director general for gasoline regulation at the energy ministry said without estimating the cost or timeframe for construction, Trade Arabia reported.

Pretoria has said it will resume oil imports from Tehran “the day after” sanctions are lifted but without its own refinery, it would have to rely on foreign oil companies who own refineries in Africa’s most developed economy.

A landmark pact clinched on July 14 between Iran and the US, Germany, France, Russia, China and Britain would limit Iran’s nuclear program in exchange for the removal of economic and oil sanctions.

Before sanctions, Iran was the biggest oil supplier to South Africa, the continent’s second-biggest crude consumer, importing around 380,000 barrels per day.

“There are benefits to owning a refinery, basically the profits are reinvested in the country and outflows can be controlled,” said Maqubela.

South African refineries were designed to refine Iranian crude but were refitted to process other types of oil after the sanctions.

“We believe it’s better to have a technology partner, a partner who will bring the financing and then a partner that can bring crude oil,” he said, without naming specific partners.